WASHINGTON – Janet Yellen, the United States Treasury Secretary, issued a stark warning on Monday, cautioning that the country could exhaust its measures to meet its debt obligations by June 1.
The new date, which is earlier than the previous estimates by the government and Wall Street, was necessitated by recent data on tax receipts.
Yellen, in a letter to House Speaker Kevin McCarthy, revealed that the Treasury Department may not be able to meet all government obligations by June 1 unless Congress raises or suspends the debt limit before that time.
This new forecast contrasts with Wall Street economists’ expectations, with Goldman Sachs indicating in its latest estimate that the deadline would be in late July, though the bank’s economists acknowledged the possibility of weaker-than-expected tax receipts advancing the timeline.
Furthermore, the Congressional Budget Office revised its estimation for the “X-date” on Monday, adding more weight to the Treasury Secretary’s warning.
“Because tax receipts through April have been less than the Congressional Budget Office anticipated in February, we now estimate that there is a significantly greater risk that the Treasury will run out of funds in early June,” wrote CBO director Phill Swagel.